B2B Markeplace

Scores of small firms and lots of not so small companies seem to create a great gulf between their day to day accounts management systems, and their facilities for recovering seriously overdue accounts. In fact an amazing number of companies just do not have an established debt collection process. This is a very widespread, but fundamental and dangerous gaffe to make.

If you consider it, it’s quite illogical to have this split between day to day accounts management and overdue debt collection. The changeover from one to the other is in principle made as soon as an invoice is one day overdue, but it would be harmful for business if you simply handed over all such accounts to a debt collection specialist. It would cost you serious amounts in fees and would dangerously alienate lots of your customers.

The best solution to this problem is to keep the whole process in-house, making the switch from credit accounts management to the debt collection process a wholly seamless experience from the clients’ point of view. It should also be part of a seamless process as far as your internal systems are concerned. Your Accounts Management Team should be pre-armed with a series of debt collection letters that basically make up the core of your debt collection process.

The first debt collection letter from the debt collection process should be a natural and smooth follow-on from your final normal Accounts Management letter. The debtor must not realise that he’s crossed from one system to another. However, it’s highly important that reluctant or slow payers are speedily made to understand that they are entangled in an ongoing, unrelenting process that will inescapably lead to them paying their dues. Your process must also make it patently obvious that the more the debtor stalls, the more he will pay.

Remember, right across the E.U., all countries are obliged to have legislation in place which allows businesses to add administration fees and daily interest to all overdue invoices. The Creditor can do this without needing to seek the courts’ permission.

Happily, there are now commercially available overdue account collection systems which provide the small business manager with a complete commercial debt collection process. The best ones are also perfectly compatible with larger companies, and will include:-

An administration system to help you to track & effortlessly follow up on overdue debts

An easy tool to compute the administration fees and daily interest.

A progressive series of debt collection letters calculated to progressively step up the pressure and cost until the debtor realises that this is the debt that must be paid as an absolute priority.

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